AT&T will ask Supreme Court to cripple the FTC’s authority over broadband

AT&T will appeal to the Supreme Court in an attempt to avoid a government lawsuit over its throttling of unlimited data plans.

The Federal Trade Commission sued AT&T in October 2014 in US District Court in Northern California, alleging that AT&T promised unlimited data to wireless customers and then throttled their speeds by as much as 90 percent. In response, AT&T argues that the FTC has no jurisdiction over any aspect of AT&T's business because the FTC lacks authority to regulate common carriers.

Further Reading

"AT&T intends to file a petition for certiorari in the Supreme Court" by the deadline of May 29, according to a joint case management update filed last week.

An AT&T victory could leave many ISPs in a regulation-free zone. The Federal Communications Commission in December 2017 voted to eliminate net neutrality rules and relinquish its authority to regulate ISPs as common carriers. One of the FCC's justifications for deregulating the broadband market was that the Federal Trade Commission can force ISPs to uphold their net neutrality promises.

But an AT&T court victory could eliminate the FTC's authority over the Internet services offered by AT&T, Verizon, and other traditional phone companies. Consumer advocacy groups last year urged FCC Chairman Ajit Pai to delay the anti-net neutrality vote until after the AT&T/FTC case is finished, but he refused to do so. Pai still hasn't finalized the net neutrality repeal, however.

Supreme Court turns down most cases

The FTC is confident that the Supreme Court won't take up the case, since it "hears about 80 cases per year out of as many as 8,000 petitions filed," the joint case management update said. The FTC wants to resume discovery in its lawsuit against AT&T without waiting for the Supreme Court to decide whether it will take the case.

But AT&T claims that its "petition has a strong chance of being granted" by the Supreme Court. "Two of the most important factors in the Supreme Court's decision on whether to review a case are whether there is a split among the circuits on the question presented and whether the issue is important. Both factors are present here," AT&T said.

The case is a bit convoluted. The FTC does not have authority from Congress to regulate companies classified as common carriers, and AT&T is a common carrier for its mobile and landline voice services. But the FTC's lawsuit relates to mobile broadband, which was not classified as a common carrier service at the time the lawsuit was filed.

AT&T argues for a status-based reading of the common carrier exemption. That would mean a company that has the status of being a common carrier could never face punishment from the FTC, even when it's offering non-common carrier services.

The FTC argues for an activity-based reading of the common carrier exemption. That would mean the FTC can regulate any non-common carrier service, even when it's offered by a company that is otherwise a common carrier.

If AT&T fails at the Supreme Court, it would have to face the FTC's lawsuit, which seeks refunds for customers.

AT&T has already relaxed its throttling polices, so the outcome of this case likely won't change AT&T's throttling policies going forward. But the case would have an impact on whether customers harmed by AT&T's previous policies will get refunds and on whether the FTC will have the authority to regulate broadband services offered by mobile phone operators or traditional landline phone companies.

The case wouldn't have any impact on the FTC's authority over Comcast and other cable companies, however. Unlike mobile voice and traditional landlines, the cable industry's VoIP phone systems haven't been classified as a common carrier service.

73 Reader Comments

If AT&T wins this case, wouldn't that just mean the inevitable case against the FCC would proceed based on the (faulty) logic within the Restoring Internet Freedom Order that the FTC has authority to regulate broadband?

Or are they trying to argue that under no circumstances should internet traffic and physical assets be regulated in any way?

If AT&T wins this case, wouldn't that just mean the inevitable case against the FCC would proceed based on the (faulty) logic within the Restoring Internet Freedom Order that the FTC has authority to regulate broadband?

Or are they trying to argue that under no circumstances should internet traffic and physical assets be regulated in any way?

I'm thoroughly confused.

I feel a bit woozy after reading the article. I need to go lay down for a little while...

So if the FCC says it has no regulatory authority, and heaven forbid SCOTUS finds the FTC has no authority either, who regulates ISPs like AT&T then? Are they going to watch themselves or let people "decide with their wallets" when a bad actor must be dealt with? Both of those options are fictions at best in the current US market. I really want to know how they'd explain who has oversight, or at least have them come out and say they don't want any interference or accountability.

It's difficult to believe that the Supreme Court would rule as AT&T desires.

They are pitching an interpretation of the rules that says any special regulatory status, such as being a common carrier being regulated by the FCC, removes the company from the authority of other regulatory policies. And that's the cases even for unrelated business activities.

AT&T is looking for a favorable interpretation of the exact wording of the authorizing legislation. The Supremes aren't in the business of parsing language and ruling on traffic violations. They will only accept this case based on needing to establish overarching guidelines. Companies seeking to bypass regulations, or trying to establish that they are immune to regulation, aren't likely to be viewed favorably.

If AT&T wins this case, wouldn't that just mean the inevitable case against the FCC would proceed based on the (faulty) logic within the Restoring Internet Freedom Order that the FTC has authority to regulate broadband?

Or are they trying to argue that under no circumstances should internet traffic and physical assets be regulated in any way?

I'm thoroughly confused.

It would certainly aide in any challenge to states coming up with their own regs. If the federal government comprehensively regresses regulatory authority, I don’t think you can argue preemption or field preemption with a straight face.

So if the FCC says it has no regulatory authority, and heaven forbid SCOTUS finds the FTC has no authority either, who regulates ISPs like AT&T then? Are they going to watch themselves or let people "decide with their wallets" when a bad actor must be dealt with? Both of those options are fictions at best in the current US market. I really want to know how they'd explain who has oversight, or at least have them come out and say they don't want any interference or accountability.

I mean, at this point, why try to hide it?

Who watches the watchers? But seriously this would set a hugely dangerous precedence. And I for one do not want to go any more backwards then we're already headed.

AT&T argues for a status-based reading of the common carrier exemption. That would mean a company that has the status of being a common carrier could never face punishment from the FTC, even when it's offering non-common carrier services.

So, by AT&T's logic, if a company has 1% of their business being a common carrier, then the FTC can't regulate their entire business?

I doubt that it will happen, but they might argue themselves into negating federal preemption of regulating their business activities. Every state will get a shot of crafting FCC-like regulations. Sure, AT&T will eventually get their way with most of them, but it will cost them a huge amount in lobbyist fees and campaign contributions.

It's difficult to believe that the Supreme Court would rule as AT&T desires.

They are pitching an interpretation of the rules that says any special regulatory status, such as being a common carrier being regulated by the FCC, removes the company from the authority of other regulatory policies. And that's the cases even for unrelated business activities.

AT&T is looking for a favorable interpretation of the exact wording of the authorizing legislation. The Supremes aren't in the business of parsing language and ruling on traffic violations. They will only accept this case based on needing to establish overarching guidelines. Companies seeking to bypass regulations, or trying to establish that they are immune to regulation, aren't likely to be viewed favorably.

Except that's how the 9th circuit has already ruled before -- providers of common carrier services are not subject to FTC oversight. That's because providers of common carrier services are subject to FCC oversight. Yup, the same Paihole-FCC that claims it shouldn't have that oversight authority, because it should belong to the FTC.

This has been a methodical manipulation, years in the making -- navigate into a regulatory deadzone where no government entity, be it state or national, has any authority over the way these corporations conduct their business. They want to be beholden and answerable to no one.

If AT&T wins this case, wouldn't that just mean the inevitable case against the FCC would proceed based on the (faulty) logic within the Restoring Internet Freedom Order that the FTC has authority to regulate broadband?

Or are they trying to argue that under no circumstances should internet traffic and physical assets be regulated in any way?

I'm thoroughly confused.

I feel a bit woozy after reading the article. I need to go lay down for a little while...

Not a super huge deal, but just fyi... "Lay" is past tense. I lay down on the couch last night. You need to go lie down. It does feel weird, though, when you first start using "lay" correctly—especially since a lot of folks incorrectly use "laid" in its place.

If youre still a customer of ATT wireless (with its horrible service), please ask yourself why you support ATT over another carrier which is less hostile to consumers?

You should also add "I have no fucking choice" is a good excuse, because in too many cases, that's the real problem.

After all, you presumed that there WAS another carrier which is less hostile to consumers for them to choose (or that the other carrier was less hostile to consumers, which is entirely arguable these days).

Gotta give folks who have no choice a break on their "responsibility" for that choice, after all.

It's difficult to believe that the Supreme Court would rule as AT&T desires.

They are pitching an interpretation of the rules that says any special regulatory status, such as being a common carrier being regulated by the FCC, removes the company from the authority of other regulatory policies. And that's the cases even for unrelated business activities.

AT&T is looking for a favorable interpretation of the exact wording of the authorizing legislation. The Supremes aren't in the business of parsing language and ruling on traffic violations. They will only accept this case based on needing to establish overarching guidelines. Companies seeking to bypass regulations, or trying to establish that they are immune to regulation, aren't likely to be viewed favorably.

It's kind of the eat-their-cake-and-have-it attitude they've always had."The broadband we're deploying is Title II so we should get big goverent subsidies, but we're not Common Carriers so we shouldn't be under Title II regulation."

It's difficult to believe that the Supreme Court would rule as AT&T desires.

They are pitching an interpretation of the rules that says any special regulatory status, such as being a common carrier being regulated by the FCC, removes the company from the authority of other regulatory policies. And that's the cases even for unrelated business activities.

AT&T is looking for a favorable interpretation of the exact wording of the authorizing legislation. The Supremes aren't in the business of parsing language and ruling on traffic violations. They will only accept this case based on needing to establish overarching guidelines. Companies seeking to bypass regulations, or trying to establish that they are immune to regulation, aren't likely to be viewed favorably.

Except that's how the 9th circuit has already ruled before -- providers of common carrier services are not subject to FTC oversight. That's because providers of common carrier services are subject to FCC oversight. Yup, the same Paihole-FCC that claims it shouldn't have that oversight authority, because it should belong to the FTC.

This has been a methodical manipulation, years in the making -- navigate into a regulatory deadzone where no government entity, be it state or national, has any authority over the way these corporations conduct their business. They want to be beholden and answerable to no one.

I haven't yet seen a good legal argument for why the Supreme Court would not side with AT&T. I've seen plenty of well reasoned arguments, but I have no idea how they would turn out in court. How would the Supreme Court take into account the FCC's pending renouncement of their regulatory authority? Would they at all, or would it not matter because it's not in effect yet? Would it not even come up because the Supreme Court sides with the 9th Circuit's original decision?

Yes, I know it's completely illogical for neither the FTC or the FCC to be able to regulate ISPs, but logic is in short supply these days. The assertion that the FTC is not able to regulate non-common carrier activities of a common carrier is completely absurd.

The realist in me says the current Supreme Court majority will side with the big business.

So if the FCC says it has no regulatory authority, and heaven forbid SCOTUS finds the FTC has no authority either, who regulates ISPs like AT&T then? Are they going to watch themselves or let people "decide with their wallets" when a bad actor must be dealt with? Both of those options are fictions at best in the current US market. I really want to know how they'd explain who has oversight, or at least have them come out and say they don't want any interference or accountability.

I mean, at this point, why try to hide it?

They will argue, like Comcast, that Congress is the authority.

Congress can’t even pass a clean budget and the FCC was literally created so that congress didn’t have to deal with complex, time consuming technical laws.

If AT&T wins this case, wouldn't that just mean the inevitable case against the FCC would proceed based on the (faulty) logic within the Restoring Internet Freedom Order that the FTC has authority to regulate broadband?

Or are they trying to argue that under no circumstances should internet traffic and physical assets be regulated in any way?

I'm thoroughly confused.

I feel a bit woozy after reading the article. I need to go lay down for a little while...

Not a super huge deal, but just fyi... "Lay" is past tense. I lay down on the couch last night. You need to go lie down. It does feel weird, though, when you first start using "lay" correctly—especially since a lot of folks incorrectly use "laid" in its place.

</unsolicited grammar lesson>

I had this argument with a girlfriend, 14 years ago. She, ironically, was an English major...Simply put, you're not correct, according to all English dictionaries I can find.Merriam-Webster defines "lie" as a non-standard usage, for present tense, for example.

It's a damned confusing word, because both "lay" and "laid" can be used as several past tenses in both American and British English. For some reason, a small number of people I've come across seem to have this backward and are very vocal about thinking they're right about it.

Why does anyone think Pai is sitting on finalizing the NN repeal? Clearly he's waiting for a favorable decision from SCOTUS on the FTC case, so he can then finish it and retire on a private island with a middle finger-shaped coffee mug in each hand.I have a feeling that, if the case goes poorly, he may back down. I hope, anyway.

Edit: Removed a redundant subordinate clause in the final sentence of my grammar rebuttal.

It's difficult to believe that the Supreme Court would rule as AT&T desires.

They are pitching an interpretation of the rules that says any special regulatory status, such as being a common carrier being regulated by the FCC, removes the company from the authority of other regulatory policies. And that's the cases even for unrelated business activities.

AT&T is looking for a favorable interpretation of the exact wording of the authorizing legislation. The Supremes aren't in the business of parsing language and ruling on traffic violations. They will only accept this case based on needing to establish overarching guidelines. Companies seeking to bypass regulations, or trying to establish that they are immune to regulation, aren't likely to be viewed favorably.

Except that's how the 9th circuit has already ruled before -- providers of common carrier services are not subject to FTC oversight. That's because providers of common carrier services are subject to FCC oversight. Yup, the same Paihole-FCC that claims it shouldn't have that oversight authority, because it should belong to the FTC.

This has been a methodical manipulation, years in the making -- navigate into a regulatory deadzone where no government entity, be it state or national, has any authority over the way these corporations conduct their business. They want to be beholden and answerable to no one.

I haven't yet seen a good legal argument for why the Supreme Court would not side with AT&T. I've seen plenty of well reasoned arguments, but I have no idea how they would turn out in court. How would the Supreme Court take into account the FCC's pending renouncement of their regulatory authority? Would they at all, or would it not matter because it's not in effect yet? Would it not even come up because the Supreme Court sides with the 9th Circuit's original decision?

Yes, I know it's completely illogical for neither the FTC or the FCC to be able to regulate ISPs, but logic is in short supply these days. The assertion that the FTC is not able to regulate non-common carrier activities of a common carrier is completely absurd.

The realist in me says the current Supreme Court majority will side with the big business.

The SCOTUS doesn't involve itself in ANYTHING unless there's a constitutional issue that needs to be clarified. That USUALLY means arguments made in courts of appeal weren't clear, or that decisions handed down were constitutionally faulty. On exceptionally rare occasions, they want to reiterate something just to make sure the world understands how it should have been interpreted (whether upholding or setting aside previous rulings).

ISP's need to be regulated. But previous rulings in somewhat similar matters tossed it all to the FCC after the SCOTUS said the FCC can't regulate them in a compelling fashion without making them common carriers under Title II. THAT move was upheld by the SCOTUS (IIRC). When the FCC reversed itself, that doesn't make the need to regulate the ISP's any lesser. Now AT&T is seeking to be absolved from following any governmental regulatory obligations.

So I do see the POSSIBILITY that by absolving themselves of the responsibility of regulating the ISP's under Title II, the FCC will get fucked over with an official SCOTUS "you can't do that", basically putting oversight of ISP's back under FCC control and once again removing the FTC from that equation.

The only reason they haven't said so yet is because no cases that deal with it have hit their docket yet.

So in no situation do I see the SCOTUS actually siding with the ISP's in this. They'd actually be contradicting a very recent ruling - something they almost never do - if they did. What I do see is a very remote possibility that NN will be reinstated because the SCOTUS says the FCC can't absolve itself from overseeing what it has the regulatory obligation to oversee.

But most likely, they'll refuse to take the case and let the previous ruling against AT&T stand.

If AT&T wins this case, wouldn't that just mean the inevitable case against the FCC would proceed based on the (faulty) logic within the Restoring Internet Freedom Order that the FTC has authority to regulate broadband?

Or are they trying to argue that under no circumstances should internet traffic and physical assets be regulated in any way?

I'm thoroughly confused.

I feel a bit woozy after reading the article. I need to go lay down for a little while...

Not a super huge deal, but just fyi... "Lay" is past tense. I lay down on the couch last night. You need to go lie down. It does feel weird, though, when you first start using "lay" correctly—especially since a lot of folks incorrectly use "laid" in its place.

</unsolicited grammar lesson>

I had this argument with a girlfriend, 14 years ago. She, ironically, was an English major...Simply put, you're not correct, according to all English dictionaries I can find.Merriam-Webster defines "lie" as a non-standard usage, for present tense, for example.

It's a damned confusing word, because both "lay" and "laid" can be used as several past tenses in both American and British English. For some reason, a small number of people I've come across seem to have this backward and are very vocal about thinking they're right about it, for some reason.

If AT&T wins this case, wouldn't that just mean the inevitable case against the FCC would proceed based on the (faulty) logic within the Restoring Internet Freedom Order that the FTC has authority to regulate broadband?

Or are they trying to argue that under no circumstances should internet traffic and physical assets be regulated in any way?

I'm thoroughly confused.

I feel a bit woozy after reading the article. I need to go lay down for a little while...

Not a super huge deal, but just fyi... "Lay" is past tense. I lay down on the couch last night. You need to go lie down. It does feel weird, though, when you first start using "lay" correctly—especially since a lot of folks incorrectly use "laid" in its place.

</unsolicited grammar lesson>

I had this argument with a girlfriend, 14 years ago. She, ironically, was an English major...Simply put, you're not correct, according to all English dictionaries I can find.Merriam-Webster defines "lie" as a non-standard usage, for present tense, for example.

It's a damned confusing word, because both "lay" and "laid" can be used as several past tenses in both American and British English. For some reason, a small number of people I've come across seem to have this backward and are very vocal about thinking they're right about it.

Why does anyone think Pai is sitting on finalizing the NN repeal? Clearly he's waiting for a favorable decision from SCOTUS on the FTC case, so he can then finish it and retire on a private island with a middle finger-shaped coffee mug in each hand.I have a feeling that, if the case goes poorly, he may back down. I hope, anyway.

Edit: Removed a redundant subordinate clause in the final sentence of my grammar rebuttal.

So the FTC's only real power is to tattle to the courts? That's like a police officer witnessing a murder, calmly recording it without interfering, and then coming back six weeks later with a warrant to arrest the perpetrator.

If AT&T wins this case, wouldn't that just mean the inevitable case against the FCC would proceed based on the (faulty) logic within the Restoring Internet Freedom Order that the FTC has authority to regulate broadband?

Or are they trying to argue that under no circumstances should internet traffic and physical assets be regulated in any way?

I'm thoroughly confused.

If neither the FCC nor FTC have the power to regulate it, then the 10th Amendment to the Constitution kicks in and AT&T now has 50 regulators instead of 1.

So the FTC's only real power is to tattle to the courts? That's like a police officer witnessing a murder, calmly recording it without interfering, and then coming back six weeks later with a warrant to arrest the perpetrator.

"Oh, I'm not a security guard, I'm a security monitor. I only notify people if there's a robbery.... There's a robbery."

I can see a small sliver of good that could come out of this, and boy is this a long shot.

So lets say that the SCOTUS decides to hear the case. Let's say that for some strange possibility that the SCOTUS rules in favor of AT&T. I can see this being the beginning of giving the states that are passing net neutrality bills traction to ensure that they have a huge chance of passing the SCOTUS.

Because if neither the FCC or FTC can have jurisdiction and aren't allowed to enforce the rules, then that turns into a SCOTUS issue since there is lack of anything as to who is responsible in a case like this where the states are passing their own laws in lieu of Congress who has yet to act.

The TELCO's have painted themselves into a corner but they haven't seen it yet.

If youre still a customer of ATT wireless (with its horrible service), please ask yourself why you support ATT over another carrier which is less hostile to consumers?

You should also add "I have no fucking choice" is a good excuse, because in too many cases, that's the real problem.

After all, you presumed that there WAS another carrier which is less hostile to consumers for them to choose (or that the other carrier was less hostile to consumers, which is entirely arguable these days).

Gotta give folks who have no choice a break on their "responsibility" for that choice, after all.

I have had ATT ever since cell phones first became affordable to the masses. Aside from a handful of irritating phone customer service incidents (which are just as likely to happen at any other large corporation), I haven't had a single problem service-wise with ATT.

The thing about cell phone carriers is they vary widely in service quality from region to region. There are regions were ATT is horrible; I've just never had to try and regularly use my phone in one of those regions.

All the carriers are about the same when it comes to being "hostile" to customers - loads of anecdotal accounts of service either being "AWESOME" or "HORRIBLE". My point is, it is stupid and ridiculous to blame consumers for not choosing a "better" option in carriers when all the major ones - Blue, Pink, Red, or Yellow are equally as bad. In my case, I have stuck with Blue for the sole reason of inertia - why hassle with switching carriers if my cost/experience won't substantially change?

If youre still a customer of ATT wireless (with its horrible service), please ask yourself why you support ATT over another carrier which is less hostile to consumers?

To be fair, they are all pretty evil (Verizon even gave birth to Ajit Pai, the posterboy for pro-corporate corruption); it's like deciding which of 5 bullies gets your lunch money.

I'm on AT&T because a) I'm on a family plan with my folks, and getting us all switched over would be a massive pain, b) They actually have decent service, both where I live and where my folks do, c) there is no way I'm moving to a CDMA carrier, since I travel outside of the US enough to where being able to just stick a local SIM card in my phone is a deciding factor for me.

If AT&T wins this case, wouldn't that just mean the inevitable case against the FCC would proceed based on the (faulty) logic within the Restoring Internet Freedom Order that the FTC has authority to regulate broadband?

Or are they trying to argue that under no circumstances should internet traffic and physical assets be regulated in any way?

I'm thoroughly confused.

If neither the FCC nor FTC have the power to regulate it, then the 10th Amendment to the Constitution kicks in and AT&T now has 50 regulators instead of 1.

Yeah, and do you have any idea how hard it is to get any kind of traction to accomplish anything then? You might as well be handing the big telecomms a free pass to do whatever the hell they want. They've got the lobbying thing on lockdown, so you can forget about congress stepping up, and without the FTC or the FCC to hold the reins, anything goes. Which is exactly how things were before Congress created the FCC to do the job Pai is trying to abdicate -- in other words, without the FTC or FCC, it was a cluster****.

If AT&T wins this case, wouldn't that just mean the inevitable case against the FCC would proceed based on the (faulty) logic within the Restoring Internet Freedom Order that the FTC has authority to regulate broadband?

Or are they trying to argue that under no circumstances should internet traffic and physical assets be regulated in any way?

I'm thoroughly confused.

If neither the FCC nor FTC have the power to regulate it, then the 10th Amendment to the Constitution kicks in and AT&T now has 50 regulators instead of 1.

This really would be a case of the lawyers winning. Imagine how much AT&T's legal budget would increase dealing with at least 50 more regulating bodies.

If AT&T wins this case, wouldn't that just mean the inevitable case against the FCC would proceed based on the (faulty) logic within the Restoring Internet Freedom Order that the FTC has authority to regulate broadband?

Or are they trying to argue that under no circumstances should internet traffic and physical assets be regulated in any way?

I'm thoroughly confused.

I feel a bit woozy after reading the article. I need to go lay down for a little while...

Not a super huge deal, but just fyi... "Lay" is past tense. I lay down on the couch last night. You need to go lie down. It does feel weird, though, when you first start using "lay" correctly—especially since a lot of folks incorrectly use "laid" in its place.

</unsolicited grammar lesson>

I had this argument with a girlfriend, 14 years ago. She, ironically, was an English major...Simply put, you're not correct, according to all English dictionaries I can find.Merriam-Webster defines "lie" as a non-standard usage, for present tense, for example.

It's a damned confusing word, because both "lay" and "laid" can be used as several past tenses in both American and British English. For some reason, a small number of people I've come across seem to have this backward and are very vocal about thinking they're right about it.

Hey, I can link to merriam-webster.com, too. The word "Lay" definitely is past tense for "Lie."

To be fair, "Lay" is also a present tense transitive verb, meaning it is acting upon an object—so not used in the sense that "I am going to lay down," since there's no object there. What am I going to lay down? In the phrase "Now I lay me down to sleep," the "I" is the subject, acting on the "me" as an object.